Why Malabo Matters

December 2, 2019

The case for Africa in the grand scheme of natural gas

by Guillaume Doane, CEO of Africa Oil & Power

Gas is the future of Africa, and Africa is the future of gas. That is but one of the major takeaways from the Gas Exporting Countries Forum (GECF) 5th Gas Summit that took place last week in Equatorial Guinea, the first to be held on African soil. Equatorial Guinea has long been a cheerleader for Africa harnessing its great gas potential, advocating for policy reforms, more investment and intra-continental LNG trade. Last week, the country used GECF as another ripe occasion to make that case. A couple decades from now, when African economies flourish on LNG exports and gas-powered industry, we should recall the Declaration of Malabo and what it meant for the African continent. We should look back to 39 non-binding, but highly symbolic words that were added last minute to the GECF’s bi-annual affirmations on natural gas as a resource for human progress. 

“To promote the GECF cooperation with African countries to use gas as the core source of energy in their development programs and climate change policies, with the aim to overcome energy poverty, enhance development and to mitigate CO2 emissions.”

In 10 years of existence GECF, which is made up of the world’s biggest gas exporters, has capably positioned natural gas as the Swiss Army Knife response to climate change – a transition fuel that is  “environmentally friendly, affordable, reliable, accessible and flexible.” As countries face mounting pressure to reduce carbon emissions, natural gas has emerged as the great compromise between industry and environmental activists. It is less polluting than other fossil fuels but also potent, cheap and abundant enough to drive economic development. A case in point is the United States, whose energy-related carbon emissions were 12 percent lower in 2018 than in 2005 while the economy grew by 25 percent. Reduced reliance on coal in favor of surging natural gas consumption contributed to that reversal. 

Policies to combat climate change should not come at the expense of poverty alleviation, economic development and job creation. Nowhere is that sentiment more relevant than Africa, which only accounts for 2.5 percent of global energy spending. That is a paltry $60 per African per year. Nearly two-thirds of the continent lacks access to electricity and most countries depend on expensive fuel imports. In the same way that the world cannot ignore Africa’s poverty, the world cannot disregard Africa’s abject energy poverty. The answer to the continent’s woes is much more spending on energy, not less, and all options should remain on the table. Alas, African oil and gas producers are under increasing duress to defend their exploitation of hydrocarbons. Last week, the African Energy Chamber launched a petition advocating for Africa’s right to explore and develop its natural resources. This is a sensible argument that has been made before on behalf of China: If advanced economies realized their industrial revolutions via fossil fuels, why can’t Africa, especially when its current emission levels are the world’s lowest?

Step in natural gas, which provides an immediate answer to Africa’s joblessness, development needs and power shortages. Gas will be the only fossil fuel to increase its market share until 2050, says GECF. Africa will make a big contribution, more than doubling its gas production over the next 20 years. Achieving a real quantum leap and breaking the “gas ceiling” will demand Africa’s version of the New Silk Road – a trillion-dollar idea that calls for new exploration, import and export infrastructure, processing plants, downstream and power facilities and gas utilization technologies. Intra-African trade and cooperation plus increased engagement via organizations like GECF will be vital. The several government delegations of non-GECF member countries that came to Malabo last week – Cameroon, The Gambia, Republic of Congo, São Tomé, among others – have understood this potent reality. Many of them will likely be GECF members one day. As will Mozambique and Senegal, which will soon become colossal LNG exporters. It is not a stretch to imagine a future in which Africa becomes a dominant gas producer.

As Equatorial Guinea Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima repeatedly told gatherers at the conference, “Gas is good for Africa.” And what is good for Africa should be good for the rest of the world.